Construction Begins on Trans Adriatic Pipeline

ATHENS—Construction work has begun on the Trans Adriatic Pipeline, which is expected to bring natural gas from the Caspian Sea to Europe and ease reliance on Russian gas imports.

The €5 billion ($5.67 billion) project is expected to supply around 10 billion cubic meters of Azeri gas a year to European countries, enough to cover the energy needs of some seven million European households.

The Trans Adriatic Pipeline, or TAP, would transport natural gas from the vast Shah Deniz II field offshore Azerbaijan via western Turkey to Greece, Albania and then across the Adriatic Sea to Italy.

Greek Prime Minister Alexis Tsipras, the European Commission Vice-President Maros Sefcovic and delegations from eight countries on Tuesday attended the inauguration ceremony in the northern city of Thessaloniki for the construction of the 545-mile pipeline, which is expected to start operations in 2020.

“The energy map of southeast Europe is changing, and Greece is turning into an energy hub for the region,” Mr. Tsipras said during the ceremony.

The Greek premier said the investment in Greece would be more than €1.5 billion and is expected to create some 8,000 direct jobs. Greece’s unemployment rate, at more than 24%, is more than twice the eurozone’s average.

TAP is owned by BP PLC, Azeri state energy company SOCAR, Italy’s Snam SpA, Fluxys Belgium SA, Spain’s Enagas and Switzerland’s Axpo.

It is designed to link the Trans-Anatolia Natural Gas Pipeline, or TANAP, which is expected to be completed in 2018, and the existing Southern Caucasus Pipeline, or SCP, which links Turkey to the Azerbaijani gas fields in the Caspian Sea through Georgia. The three pipelines form the so-called Southern Gas Corridor.

“Southern Gas Corridor will be vital for reaching the Energy Union objectives of diversification of sources, routes and energy security,” Mr. Sefcovic said. “Timely completion is crucial so that gas from the new suppliers can flow to Europe by 2020,” he added.

Total investment for Shah Deniz II project—including the cost of drilling, platforms, terminals and pipeline infrastructure—is about $45 billion.

Mr. Tsipras said the project fits well with another gas pipeline, Interconnector Greece-Bulgaria and a liquefied natural gas project off northern Greece.